Rail fares could become even more expensive if a proposed deal between to rail companies goes ahead, the UK competition watchdog has warned. Hitachi is attempting to buy Thale's rail infrastructure division but there are concerns it could lead to higher prices for passengers.
The Competition and Markets Authority (CMA) has raised concerns over the deal between the signal operators, which is worth around €1.7billion (£1.5bn). It called on the companies to offer undertakings to address its concerns by Friday.
But the CMA has now said it will launch a phase two probe into the deal after the firms said they would not be offering any further changes to their deal. HItachi agreed to buy Thales Ground Transportation Systems arm last August.
The CMA warned the acquisition could "eliminate a credible competitor" from Network Rail's new tendering process for mainline signalling. It said: “The resulting loss of competition across both mainline and urban signalling markets could increase costs for Network Rail and TfL (Transport for London) and have an adverse knock-on effect on taxpayers and passengers.”
A recent market study, carried out by rail regulator the Office of Rail and Road, found the supply of mainline signalling in Britain suffers from a lack of competition as there are essentially only two suppliers – Siemens and Alstom. Thales said it still expects the deal to complete in the second half of 2023 and stressed it has approval for the deal in nine out of 13 jurisdictions.
